MIT Investment Management Company disregards the City of Cambridge
Cooperation between MIT and the City are crucial to the future of both
Editor’s note: This was an open letter was addressed to MIT President Susan Hockfield.
It is with deep regret that I inform you that, Mr. Steven Marsh, of the MIT Investment Management Company, through his disrespectful, duplicitous and deceitful behavior, toward me and my colleagues in the City of Cambridge, no longer merits the confidence that I once had in the Institute’s honest and fair dealings with its host community.
I realize that these are strong statements but, as I value you as a leader that wants the best for MIT and the Cambridge community at large, I must be candid in the hope that you will give this matter your personal attention.
Since he took up his post at MIT Mr. Marsh, has demonstrated his utter lack of vision and imagination regarding MIT’s long term interests as well as a respect for the City of Cambridge. Early in his time in Cambridge he engineered the repurchase of Technology Square from the Beacon Companies without ever giving the City Manager or the City Council any forewarning of his actions. Actions that undermined the long term financial planning for Cambridge that our City Manager had worked so hard to establish. That behind the scenes purchase put at risk over 10 percent of the City’s tax base and resulted in a rare but vigorous denunciation of the Institute from the City Manager. This insensitive and unseemly behavior resulted in a demand on the part of the City for a new Payment in Lieu of Taxes agreement which gave the city some protection but will also result in substantially greater costs to the Institute when property is removed from the tax roles for academic purposes. The lack of simple courtesy and respect for the city’s interest exhibited by Mr. Marsh will prove to be costly for all parties in the future.
Mr. Marsh, as an accountant, appears to be true to his profession in reflecting a primary concern for the bottom line and his own personal financial interest. We understand from the listing of the top ten salaried employees at MIT, as reported to the IRS, that he stands among them. We have seen that “he knows the cost of everything and the value of nothing.” An example of this is his behavior at properties controlled by MIT in Central Square. Some years ago, MIT and the City of Cambridge embarked on a joint effort to house two new theater Companies in a building owned by MIT in Central Square. The ground floor of that building was designated for retail purposes. The theater companies have done a splendid job of bringing new life into Central Square but MIT Real Estate has, for four years left the very prominent retail space on the ground floor empty. The windows of this critically located 11,000 square feet of space are covered with the deadly For Rent placards. The space has been empty because Mr. Marsh insists on getting $45 per square foot in an area which cannot support that rent. Therefore MIT has lost over $2 million dollars in rent over the last four years while the space sat empty. Many attractive and credit worthy tenants have attempted to rent the space at a more reasonable rate but have been refused. For example, Central Bottle, a wine and cheese shop and Flour a wonderful new bakery/cafe finally gave up and took up residence in the Novartis building where they were offered similar space at half the cost. The life and energy that they have contributed to Mass. Ave. is amazing. I must also say that their investment in creating a new retail environment on the street has added a measure of safety to the neighborhood that MIT students have complained about for years.
Mr. Marsh’s insistence on a high rate of return in the theatre building retail space has resulted in him turning away, among others, a wonderful fish restaurant, The Daily Catch, recommended for that space by the Cambridge Office of Tourism and a Middle Eastern restaurant. They were very frustrated with Mr. Marsh and the lack of communication with the MIT Real Estate Office. His policies have had other consequences. The large expanse of “For Rent” signage in the theatre building has contributed to the general sense of decline in Central Square. Rather than making a contribution to its revitalization it has conveyed a sense of failure. This sense translates, in spite of the many young entrepreneurs wanting to get started in the square and willing to give it their all, a resistance on the part of lenders when they see how little regard MIT has for the area.
But, the theatre building is not an exception. Mr. Marsh has allowed a prominent store front on Massachusetts Avenue, close to the museum, to remain vacant for over a year.
It is a menacing vista along a well traveled sidewalk that does MIT’s reputation as a supporter of street life no good. It is particularly painful to see this since several young entrepreneurs just a few steps away at the Miracle of Science and Middlesex restaurants have shown what can be done to enliven the street.
Mr. Marsh’s reputation in the city for creative retail development is at a very low point. His failure at Tech Square with a large Polcari Restaurant that did not last a year provides additional evidence of his lack of talent in the retail area. It is rumored that he lost a million dollars of MIT’s money on that one mistake. His decision to eliminate the one pharmacy and cosmetic shop in Kendall Square in favor of a Fidelity sales office has been one of the greatest negatives to the area. Every retail survey that I have seen has the need for a public pharmacy in Kendall Square at the top of the list.
To now entrust Mr. Marsh and his associates with the responsibility to lead MIT’s contribution to bringing creative solutions to Cambridge’s major opportunity centers, centers that will shape the quality of life for MIT and Cambridge residents for years to come seems very unwise.
I mentioned at the beginning of this letter Mr. Marsh’s capacity for deception and deceit and I want to share with you the latest example of his capacity for duplicity and disrespect for this public official.
Last week I was invited by Mr. Marsh, his associate Mr. Owu, and Sarah Gallop to meet the consultant they had hired to provide fresh ideas for Kendall Square. I gladly accepted the invitation in the hope that given their inexperience and lack of success in the past, they might have found someone who could help them move in a new direction.
During this two hour meeting and presentation we discussed all of the MIT properties in Kendall and Central Square. In fact, I specifically brought to their attention the dead spaces in MIT properties on Massachusetts Avenue between Central Square and 77 Mass. Ave. I made specific reference to the properties between University Park and the MIT Dormitory. In a word, I found their consultant to lack the most rudimentary capacity for the vision and boldness that is necessary to make the changes needed. The biggest of her “big” ideas included an MIT Press/ Coop Book fair, a diner and an outdoor grill for Kendall Square.
Two hours after this meeting I ran into Attorney James Rafferty and three Forest City principals. Mr. Rafferty told me that Forest City was announcing, to the City Manager, development plans for the MIT properties between University Park and the MIT dormitory. Mr. Marsh et al, never even hinted that the future of the block was being discussed. Furthermore, he had not mentioned that Novartis was to acquire the development rights of land that we have been led to believe, in the past, was destined for future academic building expansion.
I found this clandestine and deceptive behavior deeply disturbing. That your staff would treat a city official with such disdain, an official that must vote on desired zoning changes in Central and Kendall Square, unacceptable and indicative of an attitude of a person which I urge you to remove from MIT’s service at the earliest possible time. Mr. Marsh later sent a letter of apology.
That MIT would assign to Forest City the responsibility for developing this key part of Massachusetts Avenue is evidence only of Mr. Marsh’s desire to close deals which I presume he will profit from. Forest City had demonstrated little if any capacity to generate the kind of lively retail activity along Massachusetts Ave. they have produced, rather a completely dead zone both along Massachusetts Avenue and within the park. No one goes to University Park that does not live there and the park has been designed to deter its use by the public.
My good faith in the MIT Real Estate Office has been shattered. I cannot simply go on faith that the MIT Real Estate Office, as currently structured and led, can be trusted either for honest discussions or for the quality of design and retail selection that we both hope for.
Finally, I will be recommending that the City of Cambridge Community Development Department engage a consultant to closely monitor the overall future development of Kendall Square. In Central Square, as the chairperson of the Mayor’s Blue Ribbon Commission on Central Square, we have been charged to make recommendations for its improvement within the year. MIT is a key stakeholder in this endeavor but I can no longer trust Mr. Marsh to represent MIT honestly and openly.
Madam President, I regard you highly and I take great pride in the global importance of MIT. You are, I know, fully committed to making this city a better place for all of us who live and work here. I regret that Mr. Marsh is not the person with the imagination, vision or integrity that will help you make the important contributions that MIT can make in fulfilling our hopes. To quote Frederick Douglass, “Where there is no vision, the people perish.”
Finally, reflecting on a town you know well, Henry Fernandez, former Director of Community Development for the much improved downtown of New Haven told us on a recent visit, “When the representatives of a large institution like Yale ignore the importance of creating a lively retail environment in its business district, then discussions at the Presidential level are essential to change that behavior.”
Madam, we are there.
Your direct intercession and help are needed if a good outcome is to occur.
Kenneth E. Reeves is a Cambridge City Councillor and former mayor.